Muriel "Mickey" Siebert, who passed away on Saturday, Aug. 24, 2013, in Manhattan, is a legend on Wall Street. Mickey was the first woman to have a board seat on the New York Stock Exchange (in 1967), the first female superintendent of banking in the state of New York (in 1977) and she had underwritten more than half a trillion dollars in public financings through her municipal bond business, Siebert Brandford Shank.
Needless to say, Siebert knew a thing or two about Wall Street, about bonds and about regulatory oversight (or lack thereof). Her advice to Main Street investors, and her commitment to financial literacy for teens and college students, remains as important today as it was when I spoke to her in October of 2009.
This is a reprint from an interview with Ms. Siebert in October of 2009.
You have had so many achievements that it is difficult to know where to begin. What's your secret to success?
It's sort of fun to see a challenge and say, "I can do it."
Wall Street is quite a challenge these days. Any tips for the average investor?
They have to start studying so they know what they are buying. That takes time and a determination. It can pay off in gains. It can keep you out of bad stocks. But it will not automatically mean good stocks.
Isn't that the brokers' job -- to put you in great stocks and avoid the clunkers?
The brokerage business has changed. If you want to use your own advice, you can get very cheap order executions. If you want to get advice from a well-paid broker, you're going to have to pay for it -- either in commissions or a higher transaction fee.
There are rare events where you can get both low costs and excellent research analysis. Full-service brokers are charging you more, so they should know and have researched the company they are recommending to you.
You have a brokerage. Do your brokers help their clients select stocks?
We're discount brokers. We have a low commission, and people have to know what they want to buy or sell.
You also have a strong municipal bond business. Can you give our readers tips on selecting bonds these days? The rating agencies bungled corporate bonds so badly in 2008 and 2009, it's hard to know whom to trust.
With municipal bonds, one of the things you have to do is to get a prospectus. In the prospectus, it will tell you the source of revenues that back the interest. If you don't like the source, you don't consider buying it. You've got bonds that are covered by the general revenues of the state. New York City and other parts of the nation also have bonds that are guaranteed by their income from water. There you have to look at the revenue streams to see if they look sufficient to be paid in good markets and bad.
Hmmm. So, it's not as simple as "avoid BB." Why do you like water bonds more than other revenue bonds?
Water is a particularly stable one because people very rarely turn off their water. That's a bill they'll try to pay. You have to analyze each one. You can't generalize. You can have a dozen safe bonds in a state where not everything has the same quality of earnings behind them.
Can you give us an example of a riskier bond?
Tobacco bonds were not respected. They were yielding more, but they were guaranteed by the tobacco. They paid more, but you have to be willing to take that risk relative to getting the better interest. That information is available in the prospectus.
If you can't blindly trust the rating agencies, and we've seen problems with the analysts in the past, where can you get good information?
You can get good information off the web today. You can get it in the financial reports or write the company and ask for an annual report and interim reports. A lot of the companies have meetings every quarter where they go into the explanation of what happened. You can get invited to those meetings with 800 numbers. Those help a lot.
What about funds?
You can make very good money in any of them -- funds, stocks or bonds -- or lose money in them. You must follow the pricing. I personally price what I own every Saturday morning.
Are you a day-trader?
I don't trade much. I have to see if a stock is down or up for a reason that I don't know. If there is news on it, like their earnings were disappointing or way above average, you would see why the stock went from $3.40 to $3.60. If their earnings weren't explaining it, you would want to know why the stock moved. You don't sell on that unless you think that increase will not continue.
For those who are moving in with relatives to make ends meet, or have lost a job, what is your best advice?
When everything is caving in, you have to have a sense of humor because it lets you laugh and keep your health. That's important. You can't let the little bastards get you down.
When it's money in general, you know that other people are going through the same things and it will change.
And let's not forget the importance of health to wealth. Stressing out over money is only going to cost you more in lost income and doctor bills...
I can have as good of a time in a good hamburger bar as I can eating a steak. And I had to do that a lot of time. I had a hamburger a block from where I live at a local Irish bar. I don't have to impress anyone.
If there were one challenge you would like to conquer today, what would it be?
I get annoyed at times, because we should be teaching investing and budgeting in schools.
Aren't your financial literacy programs being taught in New York City high schools?
I started a program in the New York schools that teaches the kids credit cards and checking accounts. When I was superintendent of banks, my deputy brought in kids who were going bankrupt at 18. They got a credit card. They maxed it out and basically went bankrupt. That's pretty pathetic. I saw that they couldn't ask their parents to teach them better habits. Their parents didn't know. And we don't teach it in school. We're sending these kids into the real world and they don't know how to handle their money. I had to lobby to get it into the NYC schools. It's in 109 schools now.
Well, with any luck we'll see more financial literacy programs for young adults and adults alike! (That's my passion, too.)